“The US Federal Reserve is carrying out its first ever system-wide stress test of bank liquidity in a move that could force banks to change their funding sources.
Known internally as “C-Lar” – the liquidity version of the Fed’s annual “comprehensive capital analysis and review” – the examination only began recently. According to people familiar with the matter, it covers some of the 19 banks subject to the capital tests as well a some of the larges foreign banks with US operations.
The new exercise is a sign that the Fed is stepping its scruitiny of liquidity – one of the biggest issues revealed by the 2008 financial crisis – and testing not just access to cash at individual banks but how they would fare under system-wide financial stress.”
Read Shahien Nasiripour’s full Financial Times article here